The Monterra Company Provided the Following Information $\begin{array}{ll}\text { Sales } & \$ 500,000 \\\text { Variable costs } & \$ 100,000 \\\text { Fixed costs } & \$ 200,000\end{array}$

Essay

The Monterra Company provided the following information:
$\begin{array}{ll}\text { Sales } & \$ 500,000 \\\text { Variable costs } & \$ 100,000 \\\text { Fixed costs } & \$ 200,000\end{array}$ A. What is the contribution margin ratio?
B. What is the level of sales in doll ars necessary to generate a profit of $\$ 40,000$ ?
C. What is the contribution margin ratio if the sal es price is increased by $10 \%$ ?
D. Using the information in part $\mathrm { C }$ , what level of sales in doll ars is necessary to generate a profit of $\$ 40,000$ ?